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H.T. Bhandary Vs. Muniyamma - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtKarnataka High Court
Decided On
Case NumberMFA No. 1299 of 1984
Judge
Reported inILR1985KAR2337
ActsMotor Vehicles Act, 1939 - Sections 110B
AppellantH.T. Bhandary
RespondentMuniyamma
Appellant AdvocateG. Lingappa, Adv. for KSRTC and ;V.G. Sabhahit, Adv. ;S.P. Shankar, Adv.
Respondent AdvocateK.R. Venkatesh Gowda, Adv.
Excerpt:
motor vehicles act, 1939 (central act no. 4 of 1939) - section 110 b -- just compensation -- assessment of damages -- principles regarding determination of multiplier -- basic multiplier 20 -- after scaling down by deductions operative multiplier 16 -- for increase of age of every 5 years multiplier goes down by 1 count -- age and circumstances of dependant, state of health of deceased and dependants limiting factors -- multiplier guided and conditioned also by actual earning span -- multiplier to be applied in accordance with the particularities of individual cases and situational modifications.;in a fatal accidents action damages must be assessed once and for all. the measure of damages is the pecuniary loss suffered by the dependants by reason of the death. the.....venkatachaliah, j.1. this appeal is in the list of orders cases for the day on the respondent's application i.a. iv, for early hearing. however, with the consent of learned counsel on both the sides the appeal is taken up for final hearing, heard and disposed of by this judgment.this appeal, by the owner of the motor-vehicle and the insurer, is directed against the award dated 14-11-1983 made by the motor accidents claims tribunal-ii, metropolitan area, bangalore city, awarding a compensation of rs. 55,000/- in a fatal accident's action.2. the claimant sought a compensation of rs. 1,35,000/-for the death of her husband, ramaiah, in themotor accident which occurred on the hosur road, bangalore at 10-30 a.m. on 18-10-1980, the deceased - ramaiah was a pillionrider on the scooter mae 6673.....
Judgment:

Venkatachaliah, J.

1. This appeal is in the list of orders cases for the day on the Respondent's application I.A. IV, for early hearing. However, with the consent of Learned Counsel on both the sides the appeal is taken up for final hearing, heard and disposed of by this Judgment.

This appeal, by the owner of the motor-vehicle and the Insurer, is directed against the award dated 14-11-1983 made by the Motor Accidents Claims Tribunal-II, Metropolitan Area, Bangalore City, awarding a compensation of Rs. 55,000/- in a fatal accident's action.

2. The claimant sought a compensation of Rs. 1,35,000/-for the death of her husband, Ramaiah, in theMotor accident which occurred on the Hosur Road, Bangalore at 10-30 A.M. on 18-10-1980, The deceased - Ramaiah was a pillionrider on the Scooter MAE 6673 driven by Kalappa, (P.W.2) and that the Car, MEN 7388 owned by the Ist appellant and driven by Shivashankar, (R.W. 1) collided against the scooter. Ramaiah succumbed to the injuries on 20-10-1980 at the NIMHANS.

3. The appellants contested the claim. In the course of the trial, claimant tendered evidence as P.W.I. Kalappa, the driver of the scooter was examined as P.W. 2. A copy of the F.I.R.; thepostmortem report; a copy of the Mahazar ; and copy of the spot sketch were marked inevidence as Exhibits P-1 to P-4.

On the side of the appellants, Shivashankar, the driver of the car was examined as R.W-1.

On an appreciation of the evidence on record, the Tribunal held that the accident was the result of the actionable negligence on the part of the driver of the car. The Tribunal estimated the contribution of the deceased to the claimant at Rs. 200/- per month. This loss of dependency was capitalised on 20 years purchase value and a sum of Rs. 48,000/- was awarded in this behalf. The other awards consisted of Rs. 2,000/- towards loss of consortium ; and of Rs. 5,000/- under the head 'item of other expenditure.' In all, a sum of Rs. 55,000/- came to be awarded.

4. Sri S. P. Shankar, Learned Counsel for the appellants contended that the finding of the Tribunal as to theactionable-negligence is erroneous and calls for interference in appeal. He urged that, at all events, the quantum ofcompensation awarded is disproportionately high and that the multiplier of 20 employed by the Tribunal for capitalisation, having regard to the age of deceased who was 50 years at the time of death, was wholly inappropriate and uninformed by the relevant criteria which bear on the choice of a multiplier, in such cases.

Learned Counsel submitted that there have been wide disparities in the choice of the 'multiplier' employed by the different Tribunals and that the principles that determine theselection of the multiplier in such cases are not kept in view; and that that while one Tribunal, guided and influenced by the analogy of Land Acquisition Cases employs a multiplier of 10 in the case of a deceased, aged 20 years; anotherTribunal, as in the present case, would employ the multiplier of 20 where the deceased was 50 years of age. Sri G. Lingappa, Learned Counsel appearing for the K.S.R.T.C. and Sri V.G. Sabhahit, Learned Counsel, also referred to these disparities in the awards and submitted arguments on this point.

5. On the contentions urged, the questions that arise for determination in this appeal are :

'(a) Whether the finding of the Tribunal that the accident was due to the actionable negligence of the driver of the Car MEN 7388, isunsupportable on the evidence on record and calls for interference ?

(b) If point (a), is held against the appellants, whether the quantum of compensation awarded in the present case is so excessive and erroneous in principle as to call for interference in appeal; and'

Whether in this case, the multiplier of '20' employed for capitalising the less of dependency is inappropriate.

6. Point (a) :

Ext. P. 4 is the sketch of the place of occurrence. Both the scooter and the car were proceeding side by side from South to North on the Hosur Road. The scooter was moving closer to theleft margin of the road and the car was moving to the right of the scooter. It is a case of collision of two vehicles moving in the same direction. The place of impact is very close to the left-side margin of the road. The sketch, Ext. P.4, would indicate that the scooter was more or less moving in a straight line but the car deflected to its left and the collision occurred very close to the left margin of the road. Kalappa (P.W. 2), the driver of the scooter, has rendered aneyewitness account. He has stated that the offending car came at a high speed from the rear and hit the scooter.

Shivashankar, (R.W.I) the driver of the car, however, would say that he had overtaken the scooter and was going ahead of it ; that he had had to slow down on account of anon coming vehicle and that when he so slowed down the scooter came from behind and hit the car. This was also the suggestion made in the cross-examination of P.W.2.

The point to notice is that this specific case that the scooter hit the car from behind is not even so much as suggested in the course of the statement of objections of the Driver. What emerges from the evidence of P.W.2, read with Ext. P.4, is that while the scooter was moving in astraight line parallel to the left-side margin of the road, the cat which was proceeding along side deflected from its line of movement to its left and hit the scooter. Theappreciation of the evidence on the point by the Tribunal does not, in our opinion, suffer from any infirmities as to call for interference in appeal. The evidence on record does support the conclusion reached by the Tribunal.

7. We, accordingly, hold and answer point (a) against the appellants.

8. Point (b) :

This contention has two aspects. The first is as to the reasonableness of the estimate of the loss of dependency at Rs. 200/- per month. The second is as to theappropriateness of the multiplier of '20'.

On the first aspect, the evidence is principally that of the claimant. She stated that her husband was quite hale and healthy and was engaged in agriculture.Deceased Ramaiah, according to her, was raising paddy crops on his land and was also rearingsilkworms, the income from this latter avocation was stated to be Rs. 2,000/- for two months, The Tribunal did not set much store by this evidence. It, however, estimated the earnings of the deceased at Rs. 10/-per day and limited the value of the contribution for thebenefit of the wife to Rs. 200/- per month. We do not think that the estimate of the Tribunal in this behalf is very much off the mark so as to call for interference in appeal. There is, an element of conjecture necessarily involved in all such estimates. But the point to note is that the loss ofdependency need not necessarily consist of money payments. It can be in the form of goods and services. By and large, the estimate made by the Tribunal is not unreasonable, and at all events, not so unreasonable as to justify interference in appeal. We are unable to agree with Sri. Shankar that the estimate of the loss of dependency is impermissibly high.

9. The next question is as to the appropriateness of the multiplier of '20' employed in this case.

We have come across a number of awards of the Tribunals which, from the point of view of the choice of the Multipliers, do not appear to be reconcilable with any uniform principle as to their choice. Some Tribunals, perhaps on the analogy of Land Acquisition valuations on capitalisation method, appear to consider that a multiplier of '10' is the maximum permissible having regard to the current rates of interest turned in by safe investments. Some others, as in the present case, have employedmultipliers of '20' or thereabouts even in cases where the deceased was 50 years of age. This question, therefore, presents aspects of some general importance.

10. In a fatal accidents action damages must be assessed once and for all. The measure of damages is the pecuniary loss suffered by the dependants by reason of the death. The pecuniary loss means the actual pecuniary benefit, in terms of money, goods and services, of which the dependants have been, in fact, deprived, whether the benefit was a result of a legal obligation or what may reasonably be expected to take place in the future. It is the amount of the pecuniary advantage which it is reasonably probable that the dependants would have received if the deceased had remained alive. The purpose is to put the dependants in the same position, as far as money could do, as if the deceased had lived his natural span of life, subject to all its uncertainties and vicissitudes. But the contingencies of the future need not necessarily be adverse and need not inevitably tend to scale down the multiplicand or the multiplier. All contingencies of the future are not adverse; all vicissitudes need not necessarily be harmful.

The following words of Windeyer J. of the Australian High Court in Bresatz - v. - Przibilla (1962) 108 C.L.R. 541 @ 544 in this behalf are worth recalling :

'The generalisation that there must be a 'scaling down' forcontingencies seems mistaken. All 'contingencies' are net adverse: All 'vicissitudes' are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasingly remunerative employment. Why count the possible buffets and ignore the rewards of fortune? Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad.'

Each case must therefore be examined on its own peculiarities But there is no compensation for sorrow and grief and for sentimental or emotional or compassionate considerations. But, different considerations might arise if the impact of the death and the effect of the manner of its occurrence go beyond grief and suffering and produce what in medical parlance is called 'Nervous Shock' and are causative of 'personality changes' which then becomes a distinct head of compensative -injury involving further considerations as to forcibility of that effect and duty owed by the tort-feasor to the person so affected. There is an instructive exposition of the law on the matter in a recent decision of the House of Lords in Mcloughlin - v. - O'Brian 1983 A.C. 410 (H.L.).

11. Now turning back to the question on hand, the starting-point in the assessment of compensation in a fatal accident's action, is the estimate of the amount of the earning of the deceased. The precariousness of the sources of the earnings or the prospects of augmentation of the income, as the case may be, must needs also be put into the scales.

In assessing the effect of factors that might influence the estimate of the dependency lost by reason of the death, two factors are to be borne in mind :

'....The first is that the more remote in the future is the anticipated change the less confidence there can be in the chances of its occuring and the smaller the allowance to be made for it in the assessment. The second is that as a matter of the arithmetic of the calculation of present value, the later the change takes place the less will be its effect upon the total award of damages....' (See Mallett v. Mcmonagle 1970 A.C. 166 @ 177 (H.L.))

Then there is the estimate of, and deduction for, the personal and living expenses of the deceased, The balance so arrived at is the datum figure. This is called the multiplicand. This is turned into a lump sum on a certain number of years' purchase and represents the amount of pecuniary advantage which it is reasonably probable that the dependants would have received if the deceased had remained alive. There are a number of imponderables, of varying degrees, in this exercise. The assessment of damages has, it is true, become an artificial and conjectural exercise. But. that is inevitable in the very nature of the task. The nature of the exercise was aptly described by Lord Diplock.

'The role of the Court in making an assessment of damages which depends upon its view as to what will be and what would have been is to be contrasted with its ordinary function in civil actions of determining what was. In determining what did happen in the past a Court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depend upon its view as to what will happen in the future or would have happened in the3. 1970 A.C. 166 @ 177 (H.L.)future if something had not happened in the past, the Court must make an estimate as to what arc the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards.'

Charles worth & Percy on 'Negligence' refers to the exercise as essentially partaking of what belongs to the realm of conjecture and hypothesis :

'....Much of the calculation necessarily must be in the realms of hypothesis 'and in that region arithmetic is a good servant But a bad master' since there are so often many imponderables. In every case 'it is theoverall picture that matters' and the Court must try to assess as best as it can the loss suffered by each dependent having regard to all the circumstances but subject to the fact that 'it is the wood that has to be looked at, and not the individual trees....'

12. Indeed there were two approaches in assessing damages, the first referred to in Davies - v. - Powll Duffryn Associated Collieries Limited and Ors. 1942 A.C. 601 in Nance - v. - British Colonnelial Electric Railway Company Ltd. 1951 A.C. 601. In DAV1ES' case Lord Wright said :

'The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a certain number of years' purchase. That sum, however, has to be taxed down by having due regard touncertainties, for instance, that the widow might have again married and thus ceased to be dependant, and other like matters of speculation and doubt...'

These observations are now to be read subject to the later innovation that the deductions for the uncertainties and vicissitudes etc, are generally made by the adjustment in and moderation of the multiplier itself.

In Nance's case5 Viscount Simon stated :

'Under the first head - indeed, for the purposes of both heads - it is necessary first te estimate what was the deceased man's expectation of life if he had not been killed when he was: (let this be 'X' years and next what sums during these X years hewould probably have applied to the support of his wife. In fixing x, regard must be had not only to his age and bodily health, but to the possibility of a premature determination of his life by a later accident....'

'....Then a deduction must further be made for the benefit accruing to the widow from the acceleration of her interest in his estate on his death Interstate in 1949 (she came into S 6,500, one third of his estate, X years sooner than she would otherwise have done) and of her interest in sums payable on a policy of S 1,000 on his life : and a further allowance must be made for a possibility which might have been realized if he had not been killed but had embarked on his allotted span of X years, namely, the possibility that the wife might have died before he did ....'

The DAVIES' method or the multiplier method as it has come to be known is now accepted as an appropriate working method ; though, however, in principle, both the methods are essentially directed towards the same end.

13. In assessing damages by capitalisation of the annual-dependency on a certain number ofyears purchase, the capitalisation is unlike cases of determination ofcompensation for acquisition of land, not a case of capitalisation in perpetuity. The period of availability of the dependency varies according as the age of the deceased-person and the age of the dependants both of which are relevant inestimating the period during which the dependency would be expected to last. Unlike, again, cases of compensation for acquisition of land, the corpus of the compensation is also expected to be consumed over the years of the dependency. Then again, the rate of returns in the investment-market on safe-investments which is the basis of capitalisation in Land Acquisition Cases, is not the basis of the choice of the number of years on which the datum figure or themultiplicand is capitalised. There are various factors which individually and cumulatively operate on the 'multiplier' eitherto scale it down or scale it up. It is neither possible nor advisable to enumerate exhaustively all the criteria that influence the choice of the multiplier in every case. Courts have been anxious to arrive at a 'just' compensation on a consideration of all matters peculiar to, or characteristic of, the individual case and its circumstances. Indeed Section 110-B of the Motor Vehicles Act enjoins upon the Court to arrive at a 'just' compensation. The purpose of an award under the Fatal Accidents Act as stated by lord Diplock is:

'....the purpose of an award of damages under the Fatal Accidents Acts is to provide the widow and other dependants of the deceased with a capital sum which with prudent management will be sufficient to supply them with material benefits of the same standard and duration as would have been provided for them out of the earnings of the deceased had he not been killed by the tortious act of the defendant, credit being given for the value of any material benefit which will accrue to them (otherwise than as the fruits of insurance) as a result of his death.'

The need to estimate and arrive at a 'just' compensation appropriate to an individual case is the very reason why Courts are chary of accepting the much too broadgeneralisation inherent in the actuarial methods, though they are useful for purposes of cross checking the results arrived at by the conventional method, which is still the 'primary basis of assessment.' The reasons for the preference of what may appear a less scientific method to the apparently morescientific method to the apparently more scientific actuarial basis of valuation is that the exercise, in the last analysis, is merely an assessment of chances of the future. There are so many imponderables and contingencies, some beneficial, some adverse, some neutral, that the whole exercise is not susceptible to, and admit of, any scientific approach and calculations. The whole exercise must be tailored to suit the individual case. This is emphasized by Windeyar, J:

'Allowances must be made for 'contingencies' or the 'vicissitudes of life', as they are glibly called. But this ought not to be done by ignoring the individual case and making some arbitrary subtraction ....Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad.'

That is also the reason for the following observations of Lord Pearson in Taylor - v. - O'Connor 1971 A.C. 115, @ 140 :

'....I do not think that actuarial tables or actuarial evidence should be used as the primary basis of assessment. There arc too many variables, and there are too many conjectural decisions to be made beforeselecting the tables to be used, There would be a false appearance of accuracy and precision in a sphere where conjectural estimates have to play a large part. The experience of practitioners and judges in applying the normal method is the best primary basis for making assessments.'

14. However, it will be relevant to keep in mind certain general and more important amongst the criteria which experience has shown to be the common denominations of generality of cases.

15. It is therefore to be noticed that the choice of the multiplier is not just limited for the purpose of estimating as to what amount if invested in the extant conditions in the investment-market would turn in, periodically, the amount of the lost dependency - though that is undoubtedly one of the purposes indeed the main purpose. The multiplier is, in addition, an important, tool in moderating the awards.

This takes us to the more important question as to the real purposes that the right choice of the multiplier isexpected to serve in this exercise of arriving at a 'just' compensation. As we have pointed out earlier, unlike thecompensation in land acquisition cases, the capitalisation is not in perpetuity, though however the purpose of a multiplier is essentially to arrive at as to v hat amount, with a prudent investment policy, would produce the value of the annual dependency for the future period over which the dependency was expected to last.

In Charlesworth & Percy on 'Negligence' (7th Edition) referring to role of multiplier, it is stated :

'.....This multiplier necessarily must remain a flexible figure for the judge to decide and usually is reasonably determined by having regard to the deceased's expectation of life, his age and health, the probable duration of his earning capacity, the possibility of his earning capacity being increased or decreased in the future, the expectation of life of the dependants and the probable duration of the continuance of the deceased's assistance to the dependants....'

The same principle was stated in Taylor - v. - O' Connor 1970(1) All. E.R. 365 as:

'........There are three stages in the normal calculation, namely: (i) to estimate the lost earnings, i.e. the sums which the deceased probably would have earned but for the fatal accident ; (ii) to estimate the lost benefit, i.e. the pecuniary benefit which the dependants probably would have derived from the lost earnings ; and to express the lost benefit as an annual sum over the period of the lost earnings; and (iii) to choose the appropriate multiplier which, when applied to the lost benefit expressed as an annual sum, gives the amount of the damages which is a lump sum.'

(underlining supplied)

Again, in Cookson v. Knowles 1979 A.C. 556 it is stated :

'....In times of steady money values, wages levels and interest rates this could be achieved in the case of ordinary working man by awarding to his dependants the capital sum required to purchase an annuity of an amount equal to the annual value of the benefits with which he had provided them while he lived, and for such period as it could reasonably be estimated they would have continued to enjoy them but for his premature death....'

XXX XXX XXX

'....The number of years purchase to be used in order to calculate the capital value of an annuity for a given period of years thus depends upon the rate of interest which it is assumed that money would earn during the period. The higher the rate of interest, the lower the number of years' purchase....'

16. In the exercise leading to the choice of the appropriate multiplier to be employed, there are two stages. The first pertains to the estimate of the rate of returns which determines the basic numerical of the multiplier. The second stage pertains to consideration of the effect of factors which scale-down the basic numerical. In the exercise concerned with the first process, the first criteria is the rate of returns on safe investments available to an investor in the investment market. Where such safe investmentsturn in a return of 10 percent per annum or thereabouts, even a multiplier of 10 would represent capitalisation in perpetuity. This is what is generally done in land acquisition cases (See) : [1985]154ITR190(SC) . If anything like a multiplier of 10 would, having regard to the present returns from safe investments represent the capitalisation in perpetuity, then it can be logically argued that even in the case of an young man of 20 years killed in an accident, the choice of the multiplier should not exceed 10 and as the age of the deceased at the time of death goes up the multiplier gets correspondingly goes down below 10, the connection between the two factors being in inverse proportion.

Is the return of 10% on safe investments, which makes the choice of the multiplier of 10 as the maximum, to be assumed in these cases? If it is not, why not? The answer is that in ascertaining the basic multiplier, 10% returns is not taken because of the principle that in quantifying compensation the repercussions of inflation are to be excluded and consequently the higher rates of return which are the expression or manifestation of inflation must also be excluded. Loss of dependency should not be capitalised or a rate of returns characteristic of an inflationary economy ; but must be capitalised on a rate of return appropriate to a stable economy. In Mallet- v. - Mc Monagle Lord Diplock 1979 A.C. 556 stated the principle thus :

'....Since the essential- arithmetical character of this assessment is the calculation of the present value of an annuity it has become usual both in England and in Northern Ireland to arrive to the total award by multiplying a figure assessed as the amount of the annual 'dependency* by a number of 'years' purchase'

'In my view, the only practicable course for Courts to adopt in assessing damages awarded under the Fatal Accidents Acts is to leave out of account the risk of further inflation, on the one hand, and the high interest rates which reflect the fear of it and capital appreciation of property and equities which are the consequence of it, on the other hand. In estimating the amount of the annual dependency in the future, had the deceased not been killed, money should be treated as retaining its value at the date of the judgment, and in calculating the present value of annual payments which would have been received in future years, interest rates appropriate to times of stable currency such as 4 per cent, to 5 per cent should be adopted.'

So, in the first stage, i.e., of ascertaining the basic multiplier, we should not take a multiplier which reflects the current high rates of interest but a multiplier which reflects rates of return appropriate to a stable currency. This would require the reckoning of a return of about 5% as the return. The basic multiplier would be 20. This is the first stage of the exercise ; but not the end of it.

17. Out of the compensation estimated on such a multiplier, several deductions have got to be made on various counts The deductions are made by an appropriate scaling-down and adjustment of the multiplier itself. Some of the primary considerations that operate to bring down the multiplier-the enumeration is not exhaustive-are :

(a) that the deceased might not have lived up to the full age of his life-expectancy and that the allowance will necessarily have to be made for the uncertainties and vicissitudes of his ownliter; (b) that even if the deceased had lived up to his normal life expectancy, the possibility, and prospect that he might not have been able to be in gainful occupation owing to illness, injury or other causes; (c) that dependants in view of their own age or state of health, might themselves not live upto the age upto which the period of dependency was expected to last; (d) that the value of the dependency so far as the dependants were concerned, might have the prospect of being replaced by some otherssource as in the case of the remarriage of the dependant-widow. This however, requires far greater degree of reassurance as to the reality of that prospect; (e) that in the case of damages in a fatal accidents action, unlike the cases of compensation for acquisition of land the corpus of the fund itself must bespent out over the period of dependency; and (f) some deductions have to be made on account of the fact that there is a lump sum payment.

How each of these considerations is to be sounded in terms of money is indeed an exercise beset with many conjectures and imponderables. The degree and extent of the scaling-down is subject to individual situational variations.

Referring to the adjustments in the multiplier for these contingencies, McGregor on Damages 14th Edn. 1980 page 808, para 1182 on 'Damages' states :

'....In addition to the discount because the award is by way of lump-sum, it is common practice for the Courts to make a further discount on account of general contingencies of life; it is said that the multiplier must suffer some reduction to cater for the possibility that the plaintiff will die earlier than expected, the possibility that he will meet with some accident that will keep him out of work for a lengthily period or even result in his premature retirement, and the like-....'

But it is also said that the chances are equal either way; but that the chances ofshorter life, it is said, is of greater significance than that of longer life.

In Charlesworth and Percy on 'Negligence' (7th Edition) pages 998 and 999 it is stated :

'...This multiplier necessarily must remain a flexible figure for the judge to decide and usually is reasonably determined by having regard to the deceased's expectation of life, his age and health, the probable duration of his earning capacity, the possibility of his earning capacity being increased or deceased in the future the expectation of life of the dependants and the probable duration of the continuance of the deceased's assistance to the dependants, throughout their joint lives. Much of the calculation necessarily must be in the realms of hypothesis 'and in that region arithmetic is a good servant but a bad master,' since there are so often many imponderables.'

18. Referring to the requirement that the fund has to be spent out over the period during which the dependency was expected to last, Lord Guest observed in Taylor- v. -O' Connor 1971 A.C. 115 @ 140 :

'....I return then to the 'multiplier'. The aim of this exercise is to provide a figure which is proportional to the injury resulting from the death. It is not to provide such a sum as would, at current rates of interest leave the widow with the income she has lost. This would put her into a better position than she would have been apart from the death because at the end of the day she would still have the capital sum left. It is anticipated that the capital will be gradually reduced over the years to provide for her support. In my opinion, the multiplier is intended to provide in a rough measure adequate compensation for the loss sustained. No precise method can be expected. It is well hallowed in practice, and depends in some measure on the expertise of judges accustomed to try these cases....'

In Clerk & Lindsell on Torts' (14th Edition) states para 364, page 235, para 430, page 284, :

'It has to be borne in mind that damages must be assessed on the basis that the total sum will be exhausted at the end of the period contem plated and that during that period the plaintiff will draw upon both the-(sic)ncome derived from the investment of the sum awarded and upon the capital itself ; this means that the multiplier will be considerably less than the number of years taken as the period of the Joss....'

'....Most importantly, also, the multiplier must be such that the capital sum awarded, together with the income earned by its investment, will be exhausted by the end of the period intended to be covered. This means that the calculation must be made on the supposition that the dependants will spend each year a part of the capital as well as the whole of the income which they receive from so much of the capital as remains It follows that the number of years purchase taken as the multiplier will be considerably less than the number of years taken as the duration of the dependency....'

(underlining supplied)

So far as the deduction to be made for lump sum payment, Supreme Court, in Madhya Pradesh State Road Transport Corporation, Bairagarh, Bhopal - v. - Sudhakar & others 1977 A.C.J. 290 held

'...But in assessing damages certain other factors have to be taken note of which the High Court overlooked such as the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife's death would have been .available to him in driblets over a number of years.'

19. Whether each of the considerations at (a) to (f) in para 17 should be evaluated individually or whether they should be cumulatively evaluated and the multiplier appropriately scaled down is merely a difference of approach. The essentially conjectural nature of the exercise is not either way reduced. However, it appears to us that all these factors should, cumulatively, be reckoned and suitable reduction of the basic multiplier from '20' is to be made. The multiplier so reduced is the operative multiplier. If such a 'multiplier' is employed, then there would be no need to further scale-down the amount of compensation so arrived, as, indeed, all the relevant factors would have been put into the scales in the process of the choice of this operative multiplier itself.

All these factors, cumulatively, may be taken to bring down the multiplier by 20% which would perhaps be a just measure of deduction for all the contingencies and considerations relevant to the matter in an average case. This brings down the basic-multiplier to the operative multiplier of 16. This multiplier of 16 would be the highest applicable. If the deceased-person was, say, between 18 and 22 years this multiplier 16 would be appropriate. It will naturally come down according as the age of the deceased at the time of death increases. As a rough and ready estimate it may broadly be estimated that the multiplier goes down by one count for the increase of the age of the deceased by every five years. The generalisation are merely broad-guidelines and are abstractions from generality of cases.

But the all important aspect, which cannot, indeed, be sufficiently overemphasized is that these guidelines are 'appropriate, essentially, to 'average' cases. Cases with special facts of their own would require to be considered on the particularities of the individual case. How far the facts and circumstances of an individual case approximate to the generalities prescribed for 'average' cases and how far departures are necessary and called for by situational differences of each case is an important and, indeed, a delicate task Courts are confronted with.

The concern of the Courts to keep the exercise, as far as possible, confined to the special circumstances of the particular case is reflected in the Courts' reluctance to be bound by precise arithmetical calculations and life expectancy and Annuity-tables in estimating the compensation; though Courts are not unwilling to have the results reached by orthodox methods, cross-checked by the Annuity-tables. Combined life-expectancy and Annuity-tables would, of course, give what is the capital to be invested to get a return of a particular multiplicand....over a particular number of years at a particular rate of interest so that at the end of the period, both the principal and interest are consumed. But this degree of precision and exactitude do not belong to the very nature of the exercise.

In Watson - v. - Powles 1968(1) Q.B. 596 it was observed ;

'I remain quite unconvinced that........the actuarial approach affords the court such a precise tool as it would desire to have in its hand, ....this table presents a very imprecise and therefore non-scientific mode of assessing damages....'

This was adopted by the Court of Appeal in Mitchell - v. -Mulholland & Another 1972 (1) Q.B.65 by Edmund Davies L.J. in the following words :

'....For my part, I too would adopt those words. Mr. Inskip strongly contended that the Registrar-General's tables have finally determined the expectation of life. This is not so: they deal merely with the average case. But the court has still to allow for the chance of the plaintiff departing, in either, direction, from the average, always bearing in mind that the earlier the death the greater the financial impact. As Mr. May put it: 'Whether the plaintiff is an average man remains in the realm of hypothesis....'

'For these reasons I am not persuaded that the actuarial method has any advantages over the conventional approach. On the contrary, I think that it may enshrine one into treating as virtual certainties what in truth are mere chances. For my part, while accepting that actuary and accountant may to a limited degree provide the judge with a means of cross, checking his calculations, and in arriving at the appropriate multiplier, I am not prepared to treat them as supplying, in the words of Lord Pearson 'the primary basis of assessment.' That, A think, must still be, by the process of seeking out in the light of experience applied to the particular case, the appropriate multiplicand multiplier, and that is the method which I (like the Trial Judge) propose to apply in the present case.'

In Me Gregor on Damages (14th Edition) the learned Authors say Mc Gregor on Damages, 14th Edn, 1980. Para 1181 at page 807

'....the Courts, as already indicated, are somewhat chary of using statistical tables and prefer the more haphazard approach of making a somewhat arbitrary deduction in the multiplier to be applied to the figure of annual loss. Nevertheless the courts are prepared to check their calculations against the available statistical data, and indeed it is partly because they have found that the results produced by the conventional method have, by and large, tallied with those produced by the statistical method that they have been unprepared to discard the conventional method as the primary method of calculation....'.However, although the courts have stated that there are sufficient objections to the actuarial method for it not to be accepted as controlling, they are still prepared to accept that actuarial evidence may be helpful : its status today is therefore that it is permissible but not required.'

In Clerk and Lindsell on Torts (7th Edition) referring to the reasons for refusing to use the actuarial tables as the primary basis, it is stated Para 365 at pages 235, 236 Para 1290 at Page 818 :

'....The main reason for this seems to be the view often expressed by the Courts that actuarial tables do not allow for all the chances an changes of this mortal life and that the assessment of future pecuniary loss depends upon so many conjectural decisions and involves consideration of so many variables that their use would give a false appearance of accuracy and precision where accuracy and precision are impossible; there is said to be no real alternative to reliance upon the experience of the judges themselves....

'....As a matter of law, therefore, it is not open to doubt that, while actuarial evidence may be admitted and used to check assessments made by the conventional method, it is the multiplicand and multiplier that must continue to be used as the primary basis of assessment.'

Judges, it is said, evaluate chances and not the probabilities in a given case and therefore too much of precision is unsafe in an exercise which is essentially imprecise.

20. One other factor which requires to be kept in mind while on the topic of the multiplier, is that the circumstance of the dependants themselves, would operate as limiting factors. Even in a case where the deceased was 20 years of age, his life expectancy would be irrelevant for the purpose of estimating the period over which dependency would be expected to last if the dependants, say the parents, are themselves over the age of 60. The multiplier would then be appropriate to the age of the dependants and not of the deceased. So are the factors of the state of health of the deceased person and of the dependants themselves which are again limiting factors. In C. K. Subramonia Iyer's case : [1970]2SCR688 Supreme Court observed :

'....There can be no exact uniform rule for measuring the value of the human life and 'the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor. Since the elements which go to make up the value of the life of the deceased to the designated beneficiaries are necessarily personal to each case, in the very nature of things, there can be no exact or uniform rule for measuring the value of human life....'

Even so, the multiplier of 16 appropriate to a deceased person of 20 years would be on the assumption that his earning-span of life would extend to the age of 65 and beyond. The multiplier is not conditioned by the life-span indicated in the Life Expectancy Tables. It is conditioned and guided by the actual earning span. If the earning span of life of a person of 20 years is only up to 60 years, then the multiplier would come down by one count from 16 to 15. If the earning span is up to 55 years it comes down to 14. But, after the age of 55 the deceased person had he lived, was entitled to a pension of, say, half the usual income up to the rest of the life-span of, say, 65 years, then the multiplier of 14 would go up by one more count, to 15. Similar considerations apply to other age groups with necessary changes to the multipliers appropriate to those age groups. These are the average cases and, as stated earlier, subject to the particularities of individual cases and situational modifications.

21. The practice of English Courts to split the estimate of damages into pre-trial and post-trial estimates so as to impart a greater degree of accuracy, at least in so far as the pre-trial period is concerned, would also be helpful. (See : Graham- v. - Dodds (1983) 1 WLR 808(HL)).

22. Now we may pass to the facts of the present case. We have held that the estimated value of the dependency lost at Rs. 200/- per month was, under the circumstances and on the evidence of the case, not exceptionable. The Tribunal has capitalised this on 20 years' purchase value. The foregoing discussion as to the considerations that determine the choice of the multiplier shows that the Tribunal was wholly wrong. Indeed the submission of the Learned Counsel that Tribunals are employing different standards in the choice of the multiplier, was the occasion for us to examine, at some length, the principles and authorities.

The age of the dependant-widow is not the criterion; it can, otherwise, be a limiting factor. It is the period over which the dependency was expected to lost having regard to the age, the state of health and other circumstances of the deceased. The deceased, according to the finding of the Tribunal, was 50 years of age at the time of his death. It would be obvious that the multiplier in this case could not exceed 10. He could, having regard to the nature of his avocation and the state of health, reasonably be expected to pursue a gainful avocation till 65 years of age. The multiplier could be taken to be 10. If we capitalise the annual loss of dependency of Rs.2400/- on 10 years' purchase value, we come to Rs. 24000/-.

We may cross-check this result with the aid of the actuarial-tables. The period of dependency would be about 15 years, having regard to the age of the deceased. Indeed, according to Annuity-tables, an amount of Rs, 24911/-, if invested, would, with interest at 5% per annum, yield Rs. 200/- per month over a period of 15 years consuming both the interest and the capital over the period. The result produced by the multiplier method is Rs. 24000/-. There is a broad correlation.

To this sum of Rs, 24000/- should be added the award for loss of expectation of life in a sum of Rs. 6000/- and for loss of consortium in the sum of Rs. 4000/- and funeral expenses in a sum of Rs. 2000/-. This brings the award to Rs. 36000/-.

23. The appeal is accordingly allowed in part and in modification of the award and decree, the compensation is reduced from Rs. 55000/- to Rs. 36000/-. On this sum of Rs. 36000/- the claimant shall be entitled to interest at 6% per annum from the date of Petition till realisation. Parties are left to bear and pay their own costs here.


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